blockworks.co
The Texas State Securities Board issued an emergency cease and desist against Plutus Financial, Plutus Lending, Abra Boost — doing business as Abra — and CEO William Barhydt.
The cease and desist ordered the named parties above from “offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public as well as stopping them, “from engaging in any fraud in connection with the offer for sale of any security in Texas.”
The Securities Commissioner is claiming that Barhydt and Abra “made offers of investments in Abra Earn in Texas containing statements that were materially misleading or otherwise likely to deceive the public.”
An investigation into Abra Earn had started in 2022, with the letter saying that “Abra announced it would cease selling investments in Abra Earn in October 2022.”
However, in October 2022, Barhydt, Plutus Financial, Plutus Lending and Abra Boost “began offering and selling investments in Abra Boost, a digital asset depository account, to accredited and institutional investors in the United States.”
In March 2023, Barhydt was interviewed by state securities regulators, when “parties collectively operating as Abra were collectively insolvent or nearly insolvent.”
The cease and desist claims that Plutus Financial, Plutus Lending and Barhydt violated the Securities Act and “engaged in fraud.”
Abra, back in September of 2022, had plans to launch as the first regulated crypto bank in the US. It had planned to launch in the US in the first quarter of 2023.
However, last December, Abra made personnel cuts across executives and other divisions following the collapse of FTX and a source told Blockworks that it had become difficult to “raise new money and get new capital into the company.”
Abra and Barhydt did not immediately respond to requests for comment.